ADC 414 

Attachment 

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ATTACHMENT ADC 414 

Revisions to DLMS and MILSTRAP Procedures to Address Owner/Manager Research of Inventory Adjustments 

(Accounting Error) (MILSTRAP D8B/D9B, DLMS 947I) (Supply/MILSTRAP) (Staffed as PDC 341A 

1. ORIGINATOR: 

a. Service/Agency: DLA Logistics Management Standards Office

b. Originator: Ms. Mary Jane Johnson, DLA Logistics Management Standards Office, (703) 

767-0677; DSN 427-0677; email: mary.jane.johnson@dla.mil 

2. FUNCTIONAL AREA: Supply/Physical Inventory 

3. REFERENCES: 

 a. DoD Inspector General (IG) Report No. D-2008-090, May 13, 2008, subject: Controls Over 

Reconciling Army Working Capital Fund Inventory Records, available at: 

http://www.dodig.mil/audit/reports/08report.htm 

b. DoD 4000.25-M, DLMS, Volume 2, Supply Standards and Procedures, Chapter 6, as revised by 

Approved DLMS Change (ADC) 307. DLMS, Volume 2, is available at: http://www.dla.mil/j6/dlmso/elibrary/manuals/dlms/v2.asp 

 c. DoD 4000.25-2-M, Military Standard Transaction Reporting and Accounting Procedures 

(MILSTRAP), as revised by ADC 255. MILSTRAP is available at: http://www.dla.mil/j6/dlmso/elibrary/Manuals/MILSTRAP/default.asp 

 d. DLMSO memorandum, March 6, 2009, subject: PDC 341, Proposed Changes to DLMS and 

MILSTRAP to Address Owner/Manager Research of Inventory Adjustments (Accounting Error) 

(MILSTRAP D8B/D9B, DLMS 947I) (Supply/MILSTRAP) 

e. DLMSO memorandum, December 22, 2009, subject: Joint Physical Inventory Working (JPIWG) 

Meeting, November 17-19, 2009, available at: http://www.dla.mil/j-6/dlmso/Archives/archives_jpiwg.asp 

f. JPIWG Meeting, March 10, 2011, minutes under development at time of publication of this ADC 

(refer to http://www.dla.mil/j-6/dlmso/Programs/Committees/JPIWG/JPIWG.asp) 

g. DLMSO memorandum, November 20, 2007, subject: ADC 255, Storage Activity Accountability 

to Service Materiel Owners, available at: http://www.dla.mil/j-6/dlmso/eLibrary/Changes/approved3.asp

 h. DLMSO memorandum, November 10, 2008, subject: Approved DLMS Change (ADC) 307, 

Administrative Update to DLMS, Volume 2, Chapter 6, Physical Inventory Control, and DLMS 846P, 

846R, and 888I , available at: http://www.dla.mil/j-6/dlmso/eLibrary/Changes/approved4.asp

4. REQUESTED CHANGE: 

[CHANGES FROM PDC 341A ARE HIGHLIGHTED IN THIS ATTACHMENT.] 

a. Title: Revisions to DLMS and MILSTRAP to Address Owner/Manager Research of 

Inventory Adjustments (Accounting Error) (MILSTRAP D8B/D9B, DLMS 947I) (Supply) 

b. Description of Change: 

(1) DOD Inspector General (IG) Report D-2008-090, Controls Over Reconciling Army Working 

Capital Fund Inventory Records (reference 3a), contained recommendations for establishing requirements 

for owners/managers to research Inventory Adjustments (Accounting Error) transactions (DS 947I with 
2 of 5 

ADC 414 Attachment 

Quantity or Status Adjustment Reason Code ‘AB’; or MILSTRAP Document Identifier (DI) Code 

D8B/D9B). The overall objective of the report is to bring owners/managers research requirements for 

Inventory Adjustments (Accounting Error) Transactions in line with the storage activities research 

requirements for physical inventory adjustment (DS 947I with Quantity or Status Adjustment Reason 

Code ‘AA’ ; MILSTRAP DI Code D8A/D9A). The research requirements are published in DLMS Vol. 2, 

Chapter 6 (reference 3b) and MILSTRAP Chapter 7 (reference 3c). 

(2) PDC 341 (reference 3d) proposed changes to MILSTRAP to address the DOD IG report 

recommendations. However many comments were received to PDC 341 and DLA expressed concern that 

PDC 341 intertwined procedures for Inventory Adjustments for Accounting Error with procedures for 

Inventory Adjustments associated with Physical Inventory in a way which might cause confusion. PDC 

341A and this resulting ADC more clearly separated and identified the owner/manager requirements for 

research of Inventory Adjustments (Accounting Errors). 

(3) PDC 341A was discussed at the November 17-19, 2009, JPIWG meeting (reference 3e). 

Draft ADC 414 was provided for JPIWG review on February 28, 2011, and was discussed at the 

March 10, 2011, JPIWG Meeting (reference 3f). Refer to the referenced minutes for discussion. At 

the March 10 meeting, the JPIWG was given until March 17, 2011 to provide any comments. Air 

Force was subsequently granted an extension to March 25, 2011, to provide comments. 

c. Reason for change. This change addresses DOD IG Report D-20008-090 recommendations 

related to DOD 4000.25-2-M, MILSTRAP, which are as follows:

008-

 DOD IG Report Recommendations: 

“1. We recommend that the Under Secretary of Defense for Acquisition, Technology, 

and Logistics revise DoD 4000.25-2-M guidance for performing the annual and end-of-day 

reconciliations of the storage activity’s inventory records to the national inventory manager’s records. 

Specifically: 

 a. Define the national inventory manager’s responsibility for performing 

causative research to include identifying and correcting the duplicate, erroneous, or missing supply 

transactions causing the inventory accounting gain or loss adjustments. 

 b. Require national inventory managers to classify, analyze, and evaluate supply 

transaction errors to determine and correct the underlying system or operational deficiencies 

causing the errors. 

 c. Establish a timeframe for completing causative research of inventory 

accounting adjustments and processing any correcting transactions. 

 d. Require the national inventory managers to follow the same guidance and 

criteria for researching accounting adjustments resulting from both the annual and the end-of-day 

inventory reconciliations. 

 e. Require storage activities and inventory materiel managers to perform the 

annual inventory reconciliations during September, close to fiscal year’s end.” 

NOTE: See bolded text below for the DUSD(L&MR) alternative recommendation for DOD IG 

recommendation 1.e above: 

DOD IG Report Management Comments. “The Deputy Under Secretary of Defense for 

Logistics and Materiel Readiness, Office of the Deputy Secretary of Defense for Acquisition, 

Technology, and Logistics partially concurred and stated that by September 30, 2008, his office 

would review guidance in DoD 4000.25-2-M for performing annual and end-of-day 

reconciliations. However, the Deputy Under Secretary stated that scheduling the annual 
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ADC 414 Attachment 

inventory records reconciliation for all DoD agencies and Components during September would 

not allow the required 45 days for correcting errors before fiscal year’s end. As an alternative 

to our recommendation, the Deputy Under Secretary recommended that the storage 

activities and inventory materiel managers perform the annual reconciliation of inventory 

records before storage activities perform their annual physical inventories. The storage 

activities schedule the annual physical inventories close to the fiscal year’s end to 

comply with the Chief Financial Officers Act.” 

DOD IG Report Audit Response. “Management comments are responsive and meet the intent 

of the recommendation. Performing the annual inventory records reconciliation before the 

physical inventories and close to fiscal year’s end would reduce the time that discrepancies 

could develop between asset balances reported by the storage activities and balances recorded 

in the DoD agencies’ and Components’ supply systems.” 

d. Procedures: To support the DOD IG Report recommendations 1.a through 1.d, and the 

DUSD(L&MR) alternative to 1.e, revise MILSTRAP Chapter 7, and corresponding DLMS, Volume 

2, Chapter 6, to clearly address owners/managers research requirements for ‘Inventory Adjustments 

(Accounting Error)’ by adding a section on “Research of Potential or Actual Inventory Adjustments 

(Accounting Errors) – DI Code D8B/D9B”. In addition, a distinct code list (new MILSTRAP 

appendix) is being added to clearly identify the inventory adjustment ‘error classification codes’ that 

apply to the DI Code D8B/D9B inventory adjustments (accounting error). 

(1) Revise DOD 4000.25-2-M, MILSTRAP, Chapter 7, as revised by ADC 255 (reference 3g), 

as shown at Enclosure 1. Changes are identified by red, bold, italicized text. Changes from 

what was staffed by PDC 341A are also highlighted in yellow. The Enclosure 1 also highlights 

in gray specific paragraphs in the chapter that are pertinent to the DOD IG report 

recommendations but did not require changes. Corresponding changes will be made to DOD 

4000.25-M, DLMS, Volume 2, Chapter 6 (as revised by ADC 307 (reference 3h). 

(2) Add new AP2.16B, “Inventory Adjustment - Accounting Error Classification Codes”, 

as shown at Enclosure 2. An Accredited Standards Committee (ASC) X12 data 

maintenance (DM) request has been submitted for new 1270 qualifier ‘ACC-Accounting 

Error Classification Code’. DLMS local code ‘ACC’ is established for use in DLMS 947I 

at this time. Upon approval of the DM, this local code becomes a DLMS migration code. 

 Local Code: A local code is a code value that is not in the current version, and has not 

yet been established at a higher ASC X12 version. A DM action is submitted to 

establish the code in a higher version. Once approved by ASC X12, the local code 

becomes a ‘migration code’. Use of a “local code” to identify code ‘ACC’ for 

“Inventory Adjustment - Accounting Error Classification Codes”, refers to establishing 

an agreement with all trading partners involved to use a code not yet recognized in 

X12. Manual intervention may be needed for some commercial applications to accept 

the local code. 

 Migration Code: A migration code is a code from a higher (but existing) ASC X12 

version that is used in a lower version. The semantic meaning and syntax are consistent 

with the higher version. Use of a “migration code” refers to establishing an agreement 

with all trading partners involved to use a valid X12 code from a higher version, with 

its approved X12 definition, at a lower version of X12. Manual intervention may be 

needed for some commercial applications to accept the higher version code. 
4 of 5 

ADC 414 Attachment 

(3) Add new ASC X12 1270 qualifier to DLMS Supplement 947I. Version 4030 updates are shown 

in Table below. Corresponding changes will be made to version 4010. 

# Location 947I Revision Reason 

1. DLMS 

Introductory 

Note 

Add ADC 414 to DLMS Introductory note. 

- ADC 414, Revisions to DLMS and MILSTRAP Procedures to Address 

Owner/Manager Research of Inventory Adjustments (Accounting Error) 

(MILSTRAP D8B/D9B, DLMS 947I) (Supply/MILSTRAP) (Staffed as PDC 341A

To identify DLMS 

changes included 

in the DS. 

2. 2/LQ01/1000 Add new LQ01 qualifier ACC with DLMS Note:

ACC Accounting Error Classification Code 

DLMS Note: 1. Use to identify the ‘Inventory Adjustment - 

Accounting Error Classification Codes’. Identifies causes for errors 

that resulted in inventory adjustment (accounting error) transactions. 

Use only with W1901 Quantity or Status Adjustment Reason Code 

‘AB-Accounting Error’. Refer to ADC 414. 

2. At this time a local code ‘ACC’ is established for use in 947I, 

version 4030. A data maintenance action has been submitted for 

establishment of ‘ACC-Accounting Error Classification code’ in a 

future version. 

To add new 

qualifier 

established by 

ADC 414. 

3. 2/LQ01/1000 Revise DLMS note for existing qualifier EL

EL Error Classification Code 

DLMS Note: Use to identify the ‘Inventory Adjustment - Physical 

Inventory Error Classification Codes’. Identifies the causes of 

potential/actual inventory adjustment (physical inventory) errors and 

the processing operations under which the errors occurred. Use only 

with W1901 Quantity or Status Adjustment Reason Code ‘AAPhysical Count’. Refer to ADC 414. 

To identify 

revised code name 

and clarify use 

IAW ADC 414. 

(4) AP2.16. Rename existing AP 2.16 Error Classification Codes, to AP2.16A, Inventory 

Adjustment - Physical Inventory Error Classification Codes, remove reference to DI Codes D8B/D9B, add 

reference to DLMS use, and revise the explanation as follows. No code values are changed. See Enclosure 2 

for new “Inventory Adjustment – Accounting Error Classification Codes” 

AP2.16A APPENDIX 2.16A 

INVENTORY ADJUSTMENT - PHYSICAL INVENTORY ERROR CLASSIFICATION CODES

NUMBER OF CHARACTERS: Three 

TYPE OF CODE: Alpha/Numeric 

EXPLANATION: Provides processing activities a means of mechanically identifying the causes 

for errors that resulted in potential/actual inventory adjustments, accounting

adjustments,

1 and the processing operations in which they occurred 

DLSS RECORD POSITIONS: 

DLMS SEGMENT/QUALIFIER:

63-65 of inventory adjustment transactions (DI Code D8A/D9A) and 

D8B/D9B) 

DLMS 947I LQ segment, LQ01 qualifier ‘EL’ used with W19 segment, 

W1901 Quantity or Status Adjustment Reason Code ‘AA-Physical Count’ 

1 The Integrated Materiel Manager may use the error classification codes in rp 63-65 in DI D8B/D9B Inventory 

Adjustment Transactions (Accounting Errors) pending the establishment of single shared asset balances (see chapter 7).
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ADC 414 Attachment 

(5) Revise the MILSTRAP and DLMS Table of Contents as needed. 

(6) Add to MILSTRAP and DLMS acronyms: TIPR Total Item Property Record. 

5. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: Revises the DLMS and MILSTRAP manuals to support recommendations for 

revising MILSTRAP made by DOD Inspector General (DOD IG) Report D-2008-090, Controls Over 

Reconciling Army Working Capital Fund Inventory Records. 

b. Disadvantages: None identified. 

6. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: This change can be 

implemented on a staggered basis by the Components:

a. USAF: Earliest date AFMC could comply with requirement is estimated at mid-2014 assuming 

funding is provided and ECSS implementation is not impacted. 

b. No additional implementation dates were provided. Requests all DOD Components, except 

USAF, identify their target implementation date for this ADC to the DLA Logistics Management 

Standards Office. 

7. IMPACT: 

a. Publication(s): 

(1) Revise DOD 4000.25-M, (DLMS) and DOD 4000.25-2-M (MILSTRAP) as noted. 

(2) May require changes to other supporting DOD Component publications as needed.

b. Automated Information Systems (AIS). May impact DoD Component AIS.

 c. Procedures. Impacts procedures affected by publication changes, for owners/managers to 

research inventory adjustments (accounting error). (MILSTRAP D8B/D9B (DLMS 947I with 

Quantity or Status Adjustment Reason Code ‘AB - Accounting Error’). 

8. COMMENTS TO PDC 341A are at Enclosure 3. 

Enclosures 
C7-1 

ADC 414 

Enclosure 1 

MILSTRAP Chapter 7 

ENCLOSURE 1 to ADC 414 

Revisions to DOD 4000.25-2-M, MILSTRAP, Chapter 7 (as revised by ADC 255) 

NOTE: Corresponding changes will be made to DLMS, Vol 2, Chapter 6 (as revised by ADC 307) 

ADC 414 Changes are identified by red bold italicized text. 

MILSTRAP Chapter 7 paragraphs that are pertinent to the DOD IG recommendations, but do not require changes are 

highlighted in gray for information. These paragraphs have not been changed.

C7. CHAPTER 7

PHYSICAL INVENTORY CONTROL

C7.1. GENERAL. This chapter provides procedures, performance objectives, and reporting 

requirements for maintaining accurate records of the physical inventory, conducting physical inventory 

counts, and reconciling record variance for materiel within the DoD supply system. 

 C7.1.1. Applicability. Basic elements of the physical inventory control program prescribed by 

this chapter apply to the Military Departments and the Defense Agencies, hereafter referred to as 

DoD Components, and establish: 

 C7.1.1.1. Uniform procedures, based on existing DoD policy, for maintaining accurate 

records, conducting physical inventories, and location surveys/reconciliations, researching inventory 

discrepancies, and causes for adjustments, performance assessment, and for quality control of work 

processes prescribed by the DoD Physical Inventory Control Program (PICP). 

 C7.1.1.2. Management control of all DoD wholesale supply system materiel to include: 

 C7.1.1.2.1. principal items, 

 C7.1.1.2.2. packaged petroleum, oil, and lubricants, 

 C7.1.1.2.3.secondary items regardless of whether assets are purchased with stock 

fund or procurement appropriations, 

 C4.1.1.2.4. ammunition, 

 C7.1.1.2.5. forms and publications, and 

 C7.1.1.2.6. subsistence. 

 C7.1.1.3. Management data and performance standards necessary to measure the 

effectiveness of physical inventory control in the DoD supply system. 

 C7.1.2. Exclusions

 C7.1.2.1.These procedures are not applicable to bulk petroleum; complete ships, aircraft, 

ballistic missiles, nuclear weapons, space vehicles; assets located at contractor-owned and/or 

contractor-operated facilities which are not maintained on the DoD wholesale property accountability 

records; Industrial Plant Equipment reportable to the Defense Industrial Plant Equipment Center; 

National Security Agency/Central Security Service assets; and National Defense Stock Pile assets. 
C7-2 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

Loaned materiel and materiel in transit shall be accounted for in accordance with chapter 4 of this 

manual and DoD Component procedures. 

 C7.1.2.2. Physical inventory control procedures for bulk petroleum are contained in DoD 

4140.25-M. 

 C7.1.2.3. Nuclear weapons for which DoD has custodial responsibility. Inventories are in 

accordance with Joint Publication 6, Volume II, Joint Reports; part 4, Nuclear Weapons Reports; 

section 5, Stockpile Inventories and Inventory Reports. 

C7.2. POLICY. DoD policy is contained in DoD 4140.1-R. 

 C7.2.1. Purpose. The purpose of the DoD physical inventory control process is to: 

 C7.2.1.1. Ensure materiel accountability is properly executed within the DoD; 

 C7.2.1.2. Ensure accurate property accountability records for the physical inventory are 

maintained in support of customer requirements and readiness by performing physical inventories and 

location surveys/reconciliations; 

 C7.2.1.3. Identify and help resolve problems in supply system work processes affecting 

property accountability records by performing quality control of the work processes; and 

 C7.2.1.4. Identify repetitive processing errors and maintain accurate records for supply 

system transactions generated within the supply system by researching and reconciling property 

accountability record imbalances and potential discrepancies. 

 C7.2.2. Philosophy

 C7.2.2.1. The dynamic nature of the physical inventory control function, and the cost of 

counting and reconciling records, requires that the approach be more selective than the "100 percent 

wall-to-wall total item count" concept. Available inventory resources must be directed toward those 

potential and actual discrepancies, controlled inventory items, and weapon system critical items for 

which the maximum returns shall be derived from the resources which are applied. 

 C7.2.2.2. A fundamental requirement of inventory integrity is to implement the technical 

capability that provides for the total item property record which includes a single shared asset balance 

maintained by the storage activity. 

 C7.2.3. Security of Materiel. Security is the first line of defense for physical inventory control; 

therefore, DoD Components shall pay special attention to the safeguarding of inventory items. This 

shall include analysis of loss rates through inventories, financial liability investigation of property loss 

reports (DD Form 200), and criminal incident reports, to establish whether repetitive losses indicate 

criminal or negligent activity. Physical security procedures for supply system materiel are contained 

in DoD 5200.8-R. 

 C7.2.4. Asset Management. A single total item property record shall be shared to provide 

materiel asset information. The total item property record shall, as a minimum, include materiel that is 

due in, in transit, in organic maintenance facilities, in a contractor's custody, on loan, on hand in 

distribution centers, reported on hand at retail activities, and for reported assets in the custody of 

users. The record or record set shall identify the quantity, condition, and value of the item assets for 

each organizational entity having physical custody of these assets. 
C7-3 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

 C7.2.5. Maintaining Property Accountability/Responsibility. The property accountability 

responsibility for segments of the total item property record may be delegated to, but not shared by, 

one or more organizational entities. However, asset balance information for a particular segment 

(such as the storage activity balance for an item) shall be shared, duplicative records shall not be 

maintained. 

 C7.2.5.1. The storage activity maintains the property accountability record for all materiel 

in storage and is responsible, as a minimum, for materiel custody, care, receipt, storage, and issue; 

safeguarding, and re-warehousing materiels; physical inventory, and research; location 

survey/reconciliation; quality control checks; supply discrepancy report initiation, research and 

resolution; investigating and assessing financial liability for loss, damage, and destruction of 

Government property; and appropriate actions necessary to ensure that the physical on-hand quantity 

and the total item property record quantity are in agreement. 

 C7.2.5.2. The owning DoD Component shall assume or assign the accountability for 

materiel not in the physical custody of a storage activity, including materiel inducted for organic repair, 

test assembly/disassembly, conversion, modification, or reclamation; materiel in a contractor’s hands 

(in accordance with provisions of the FAR; materiel in transit; materiel on loan, etc. 

 C7.2.5.3. The Integrated Materiel Manager is responsible for initiating and directing the 

conduct of physical inventories; discrepancy research, and reports; resolving discrepancies, 

investigating, and assessing liability for loss, damaged, and destruction of Government property; and 

take appropriate actions necessary to ensure that the on-hand quantity and the total item property 

record quantity are in agreement for all DoD materiel that is not in the physical custody of DoD 

Activities. 

 C7.2.6. End of the Day Processing. Use the following end of the day processing procedures 

pending the established of single shared asset balances (See paragraphs C7.2.2. and C7.2.4., 

above.). End of the day processing shall be accomplished as follows: 

 C7.2.6.1. Owners/managers and storage activities shall match all active record (i.e., 

stock numbers which had any transactions affecting record balances) on-hand balances daily. The 

storage activity shall submit the daily closing on-hand balance to each affected owner/manager using 

DI Code DZH, Location Reconciliation Request, prepared in the appendix AP3.63 format, citing Type 

of Location Reconciliation Request Code 1 in record position 7. 

 C7.2.6.2. Storage activities shall prepare location reconciliation request transactions by 

line item (stock number + supply condition code (SCC) = line item), type of pack, and date packed 

/expiration date for subsistence, for each record experiencing transactions affecting the balance 

(including zero balance) and for no physical inventory adjustment required (DI Code D8A with zero 

quantity) transactions. The storage activity shall also submit DI Code DZM, End of Day Accountable 

Transaction Count, prepared in the appendix AP3.66 format, to advise the owner/ manager of the 

number of balance affecting transactions that were forwarded during the daily course of business. 

This transaction is compared to the actual number of transactions received by the owner/manager to 

identify missing transactions and aid in unreconciled balance (URB) research. 

 C7.2.6.3. Owner/managers shall match the storage activity location reconciliation 

requests to the affected records. Imbalances shall be programmatically researched to assure 

consideration of in-float documents, delayed transactions, and duplicate transactions. For unresolved 

mismatched quantities, the owner/manager shall update the affected record on-hand balance with the 

storage activity's closing on-hand balance. The mismatched quantity (gains and losses) shall be 

adjusted with a DI Code D8B/D9B, Inventory Adjustment Increase/Decrease (Accounting Error) 

transaction. 
C7-4 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

 C7.2.6.4. Owner/managers shall refer to section C7.6 for guidance on research of 

potential or actual Inventory Adjustments (Accounting Error) (D8B/D9B). 

 C7.2.6.5. Owners/managers shall request assistance from the storage activity to isolate 

causes of record imbalances to maintain transaction level integrity. The storage activity assistance 

should focus on data transmission, e.g., lost transactions, etc. Owners/managers shall input DI 

Code DZJ, Transaction History Request to the storage activity for data transmission, e.g., lost 

transactions, etc. 

 C7.2.7. Reconciling Total Item Property Records with Financial Records. Owning DoD 

Components shall reconcile total item property records and financial records as prescribed by DoD 

7000.14-R to ensure compatibility of the total inventory value reflected by these records and 

associated reports. 

 C7.2.8. Item Management/Control. DoD materiel is managed and controlled by stock number, 

and SCC, and by type of pack, and date packed/expiration date for subsistence; therefore, physical 

inventories shall be conducted and the results reported to owners/managers by stock number and 

SCC and by type of pack and date packed/expiration date for subsistence. 

 C7.2.9. Storage Activity Record Keeping. Storage activities shall maintain quantitative balance 

records for all materiel on hand regardless of ownership. Storage activities shall maintain transaction 

histories to support the balance records. Maintenance of these records shall provide the capability to 

detect theft or diversion of materiel and improve the ability to determine the cause of inventory 

variances for corrective action. 

 C7.2.10. Inventory Prioritization. DoD Components shall select and prioritize items for 

inventory for which they are accountable as follows: 

 C7.2.10.1. Inventory Sampling. A stratified, hierarchal inventory sample shall be 

accomplished at least once annually for the purpose of validating the accuracy of the accountable 

record. The results of the sample shall be reported in accordance with the stratification and 

tolerances cited in paragraph C7.2.12.5. 

 C7.2.10.2. Complete inventories shall be accomplished as follows: 

 C7.2.10.2.1. Controlled Inventory Items. The following controlled inventory items 

(identified in DoD 4100.39-M) require complete physical inventory and do not qualify for use of a 

random statistical sampling approach: 

 C7.2.10.2.1.1. Top secret. 

 C7.2.10.2.1.2. Narcotics, drug abuse items, and alcohol. 

 C7.2.10.2.1.3. Category I non-nuclear missiles and rockets (semiannually in 

accordance with DoD 5100.76-M. 

 C7.2.10.2.1.4. Precious metals. 

 C7.2.10.2.1.5. Small arms. 

 C7.2.10.2.1.6. Radioactive items. 

 C7.2.10.2.1.7. Inert nuclear ordnance materiel. 
C7-5 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

 C7.2.10.2.1.8. Other items that may be designated by OSD or the DoD 

Component. 

 C7.2.10.2.2. If ammunition or subsistence is subjected to complete inventory, 

physical inventory and location survey may be conducted concurrently. 

 C7.2.10.2.3. Controlled inventory items not subject to annual complete physical 

inventory must be subjected to annual random statistical sampling. Acceptable statistical sampling 

techniques are widely prescribed and may be used so long as every item included in the population 

has an equal probability of being selected in the sample. The statistical sampling technique must 

provide reasonable assurance (as a minimum) that the property accountability records are accurate 

with a 95 percent level of confidence, accuracy level of 95 percent, and a maximum margin of error of 

2 percent. If the sample inventory results do not satisfy the above criteria, complete physical 

inventory of the population from which the sample was selected, shall be performed. 

 C7.2.10.3. Inventories for items not designated for complete inventory under 

subparagraph C7.2.10.2., shall be accomplished as a result of: 

 C7.2.10.3.1. Total or partial materiel release denials (spot inventory--see 

subparagraph C7.3.4.2. and appendix AP2.2, Type of Physical Inventory/Transaction History Code 

E). 

 C7.2.10.3.2. Location reconciliation variances. 

 C7.2.10.3.3. Location survey errors. 

 C7.2.10.3.4. Owner/manager request (special inventory); or 

 C7.2.10.3.5. Owners may select items for inventory based on the owner physical 

inventory prioritization methodology or model which considers characteristics identified by each 

Service based on Service priorities, readiness drivers; etc. The owner and depot would negotiate 

projected workload at least once annually (prior to each Fiscal Year). The owner would provide the 

prioritization methodology/model results to the distribution depot annually by submission of a DI Code 

DJA transaction with a Type Physical Inventory Code I.1

 Items selected for inventory based on the 

owner priority selection system shall not be given priority over items in subparagraphs C7.2.10.1., 

C7.2.10.2, C7.2.10.3.1, C7.2.10.3.2, and C7.2.10.3.3. 

 C7.2.11. Potential Discrepancies. Potential discrepancies between the actual physical count of 

materiel and the property accountability record on-hand balance shall be researched and resolved in 

accordance with table C7.T2., either by: 

 C7.2.11.1. Correctly posting supply transactions (e.g., receipts, issues, adjustments, etc.) 

discovered during the research process that were previously incorrect or unposted resulting in the 

record imbalance; and/or 

 C7.2.11.2.Posting an inventory adjustment to correct the record imbalance. 

 C7.2.12. Accuracy and Performance Goals. The acceptable DoD accuracy and performance 

goals are as follows: 

 

1

 The Distribution Standard System is capable of accepting DI Code DJA with Type of Physical 

Inventory/Transaction History Code I, however the Services have not yet implemented this capability. Service 

Supply PRC representatives are to notify DLMSO when implementation date is known per Approved DLMS 

Change (ADC) 33 (available at http://www.dla.mil/j-6/dlmso/Changes.) 
C7-6 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

 C7.2.12.1. Materiel Denial Goal: Not greater than 1 percent. 

 C7.2.12.2. Receipt Processing Performance Goal: 90 percent stored and posted within 

MILSTRAP, chapter 4, time standards. 

 C7.2.12.3. Record Reconciliation Program Goal: 

 C7.2.12.3.1. Location Survey Accuracy: 

 C7.2.12.3.1.1. General Supplies: 97 percent. 

 C7.2.12.3.1.2. Ammunition: 98 percent. 

 C7.2.12.3.2. Location Reconciliation Accuracy: 

 C7.2.12.3.2.1. General Supplies: 97 percent. 

 C7.2.12.3.2.2. Ammunition: 98 percent. 

 C7.2.12.4. Ammunition Property Accountability Record Accuracy Goal: 95 percent. 

 C7.2.12.5. General Supplies Record Accuracy Goals2

Table C7.T1. General Supplies Record Accuracy Goals

Stratification Sub-Populations And Associated Goals And Tolerance Levels

CATEGORY SUB-POPULATION GOAL 

(PERCENT)

TOLERANCE

(PERCENT) 

A UNIT PRICE > $1,000 99 0 

B UNITS OF ISSUE WHICH MAY BE NONDEFINITIVE OR DIFFICULT TO MEASURE3

 OR 

(ON-HAND BAL > 50 AND EXTENDED VALUE < 

$50,000) 

 OR 

NSN ACTIVITY (# transactions affecting balance in 

one year) > 50 

95 10 

C DATE OF LAST INVENTORY > 24 MONTHS 

 AND 

ON-HAND BALANCE < 50 

95 5 

D ALL OTHER MATERIEL NOT MEETING ABOVE 

CRITERIA 

95 0 

95 percent Confidence Level 

+4 percent Bound applicable to each category 

C7.3. PHYSICAL INVENTORY PROCEDURES

 C7.3.1. Inventory Program Accomplishment. Storage activities shall monitor program 

 

2

Within 30 days after the end of the 4th quarter each fiscal year, Components must submit record accuracy goals 

information to ADUSD SCI, via electronic mail. Submit to: Debra.Bennett@osd.mil. Data may be obtained throughout 

the year. 

3

Applicable Units of Issue: AT, AY, BF, BK, CD, CF, CZ, DZ, FY, FT, FV, GP, GR, HD, KT, LB, MR, OZ, OT, PG, PR, 

SE, SF, SO, SP, SY, TD, TE, TF, TN, TO, TS, MC, MX, YD 
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accomplishment throughout the fiscal year to ensure that the requirements of paragraph C7.2.10. are 

met. 

 C7.3.2. Pre-inventory Planning. The potential for count inaccuracies shall be reduced by 

conducting pre-inventory planning to include: 

 C7.3.2.1. Actions to ensure location integrity by correcting such situations as 

unbinned/loose materiel; questionable identity of materiel in location; and single locations containing 

multiple SCCs or stock numbers, inadequately labeled shelf-life items (date of 

manufacture/assembly/pack or date of expiration/ inspection/test, as appropriate); and/or materiel lots 

stored in a single location. 

 C7.3.2.2. Document cleanup to ensure to the extent possible that receipts, adjustments, 

transaction reversals, and other transactions are posted to the property accountability record and that 

in-process receipts are stored in location prior to the established physical inventory cutoff date. 

 C7.3.3. Scheduled Inventories

 C7.3.3.1. Storage activities shall initiate all scheduled inventories based on item 

characteristics, specifically the controlled inventory item code and any other category codes 

designated by DoD Components that require physical inventory not less than once each fiscal year, 

with DI Code DJA, Physical Inventory Requests, prepared in the appendix AP3.15 format, using Type 

of Physical Inventory/Transaction History Code G. 

 C7.3.3.2 Storage activities shall initiate all scheduled inventories based on selection and 

prioritization model criteria with DI Code DJA requests, using Type of Physical Inventory/Transaction 

History Code I. 

 C7.3.3.3. Storage activities shall initiate the scheduled random statistical sample inventory 

to meet the Departments’ requirement to validate the accuracy of the supply records with DI Code 

DJA requests using Type of Physical Inventory/Transaction History Code N. 

 C7.3.3.4. Owners may initiate a scheduled random statistical sample inventory of line 

items owned to determine the overall accuracy of their records with DI Code DJA, using Type of 

Physical Inventory/Transaction History Code L. Storage activities may also initiate a scheduled 

random statistical sample inventory of line items in storage to determine the overall accuracy of their 

records with DI Code DJA, using Type of Physical Inventory/Transaction History Code P. 

 C7.3.4. Unscheduled Inventories

 C7.3.4.1. Owners, AOs, and storage activities shall initiate special inventories using DI 

Code DJA transactions, prepared in the appendix AP3.15 format. If an inventory has not been taken 

within the past 90 calendar days, cite Type of Physical Inventory/Transaction History Code C, D, J, or 

K in the transaction. If an inventory has been taken within the past 90 calendar days, an effort shall 

be made to construct a transaction history and from it determine what the item balance should be or 

what discrepancy may have caused an imbalance. Only when these efforts fail to produce 

satisfactory results shall special inventories be generated. In this case, cite Type of Physical 

Inventory/Transaction History Code H in the DI Code DJA transaction. The procedure for restricting 

special inventories may be waived when the inventory manager has recorded backorders for the item 

involved. 

 C7.3.4.2. Storage activities shall initiate spot inventories as a result of a total or partial 

materiel denial on classified and sensitive items regardless of value, pilferable items when the value 
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of the variance is greater than $100, and for non-controlled items variances greater than $5000. 

These requests shall cite Type of Physical Inventory/Transaction History Code E. 

 C7.3.4.3. Storage activities shall accomplish all requests for spot inventories. 

 C7.3.4.4. Storage activities may initiate unscheduled inventories as a result of on-hand 

balance mismatches between the locator and property accountability records with DI Code DJA, using 

Type of Physical Inventory/Transaction History Code M. 

 C7.3.5. Canceling Inventories

 C7.3.5.1. When conditions exist which preclude accurate completion of an inventory which 

has been established, the inventory shall be canceled by the storage activity or the owner/manager. 

Conditions which may require cancellation include, but are not limited to, catalog changes, rewarehousing of materiel under inventory, insufficient resources, insufficient time to meet established 

inventory timeframes to notify other affected owners/managers, and acts of God. 

 C7.3.5.2. When an owner/manager cancels an inventory, the owner/manager shall notify all 

affected storage activities using a DI Code DJA Physical Inventory Request citing Management Code N. 

 C7.3.5.3. When a storage activity cancels an inventory, or when an owner/manager 

requests cancellation of an inventory, the storage activity shall notify the requesting owners using the 

DI Code DJA Physical Inventory Request citing Management Code N. When a canceled inventory is 

required to meet annual inventory schedule requirements, it must be rescheduled by the storage 

activity within the current fiscal year. When a spot inventory (Type of Physical Inventory/Transaction 

History Code E) is canceled, it must be rescheduled within 15 calendar days. 

 C7.3.6. Conducting, Recording, and Reporting the Inventory

 C7.3.6.1. Physical inventory procedures at storage activities shall provide the required 

asset-to-record accuracy with positive control of materiel and documentation which are in float, 

including materiel release orders, receipts, condition transfers, catalog, and other data changes, etc. 

 C7.3.6.2. The storage activity may reduce the volume of in-float accountable documents, 

during the period required for an item count, by suspending the issue of low priority materiel release 

transactions from items undergoing inventory. However, materiel shall be released for items 

undergoing inventory when such release is necessary to meet the order/ship timeframes prescribed 

by DoD 4140.1-R, to include the recognition of the RDD. The storage activity may also reduce the 

volume of in-float accountable documents by deferring routine SCC changes, providing the chapter 5 

control requirements are complied with. 

 C7.3.6.3. Storage activities shall complete physical inventories and transmit the 

appropriate DI Code D8A/D9A Inventory Adjustments to the owner/manager within 30 calendar days 

subsequent to the Physical Inventory Cutoff Date (PICD) for scheduled inventories and within 15 

calendar days subsequent to the PICD for unscheduled inventories. 

 C7.3.6.4. The storage activity shall compare the adjusted count with the balance 

maintained by the storage activity to determine the potential variance and initiate post count validation 

and preadjustment research as required under section C7.4. 

 C7.3.6.5. Immediately upon completion of post-count validation and preadjustment 

research, the storage activity shall record the count and date of last inventory on the storage activity 

quantitative balance record. 
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 C7.3.6.6. When no adjustment is required, the storage activity shall update the storage 

activity record with the date of last inventory and transmit a DI Code D8A with zero quantity for each 

line item to the owner/manager to indicate completion of the inventory. The owner/manager shall 

update the date of last inventory using the adjustment transaction date. 

 C7.3.6.7. When the storage activity record reflects more than one owner for commingled 

materiel, the storage activity shall apply all gains and losses to the wholesale manager. The storage 

activity shall prorate any losses that cannot be applied to the wholesale manager among all owners 

having balances. Storage activities shall not consider foreign owner balances in the prorating 

process. Foreign owner and Special Defense Acquisition Fund balances shall not be altered unless 

they are the only remaining balances for reporting a loss. Resolution of these losses shall be in 

accordance with DoD Security Assistance Program policy. 

 C7.3.6.8. The storage activity shall process DI Code D8A/D9A adjustments by line item, 

and by each date packed/expiration date and type of pack for subsistence, to update the storage 

activity quantitative balance record and each owner/manager record. 

 C7.3.7. Reconciling Manual Records for Controlled Items. When manual records are 

maintained for control of assets in secured storage, the storage activity, as a minimum, shall reconcile 

these records at the time of inventory with the corresponding storage activity records and physical 

counts of materiel. 

 C7.3.8. Unscheduled Physical Inventory Follow-up

 C7.3.8.1. When the owner/manager has requested an unscheduled inventory and no 

adjustment or completion transaction has been received within 40 calendar days of the date of the 

request, the owner/manager shall follow up using a DI Code DJA request which cites Management 

Code X in record position 72 and duplicates the remaining data from the DI Code DJA transaction 

which established the inventory. 

 C7.3.8.2. The storage activity shall respond to the owner/manager follow-up within 5 

calendar days by providing the appropriate adjustment, completion, or cancellation transaction. If an 

adjustment or completion transaction was previously submitted and a follow-up is received, the 

storage activity shall reply by submitting a DI Code DJA with Management Code Y to the 

owner/manager and Transaction History Transmittal (DI Code DZK) reflecting the actual physical 

inventory adjustment. 

 C7.3.8.3. If the storage activity does not have a record of the owner/manager original DI 

Code DJA request, the storage activity shall process the DI Code DJA with Management Code X as 

an original DI Code DJA. 

C7.4. RESEARCH OF POTENTIAL OR ACTUAL PHYSICAL INVENTORY ADJUSTMENTS

(PHYSICAL INVENTORY) – DI Code D8A/D9A

 C7.4.1. Policy. DoD Components shall ensure that potential or actual inventory adjustments 

(Physical Inventory), (DI Code D8A/D9A) are researched in accordance with the value of the 

adjustment and type of item involved. The DoD criteria for this research are set forth table C7.T2. and 

shall be used as the basis for selective research for supply system materiel. A reduction of the 

volume of erroneous adjustments can only be achieved by conducting specified degrees of research 

before posting the adjustment transaction. More stringent research requirements may be imposed by 

DoD Components based upon the limits of resources available and upon specific asset control 

problems. However, in no case shall adjustments be processed against items without required 

preadjustment research having been performed (see table C7.T2.). 
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 C7.4.2. Objectives. Analysis of inventory adjustments is vital in order to: 

 C7.4.2.1. Identify failures in the control systems so improvements can be made. 

 C7.4.2.2. Reduce similar discrepancies in the future. 

 C7.4.2.3. Ensure that the proper adjustment was made. 

 C7.4.2.4. Evaluate indicators of trends or system problems for corrective action. 

 C7.4.2.5. Detect negligence, abuse, or theft of materiel. Known or suspected negligence, 

abuse, or theft shall be researched in accordance with DoD 7000.14-R and table C7.T2. 

 C7.4.3. Timeliness of Research. Timely completion of the research of potential adjustments is 

essential. Delay only increases the complexities of adequate research and reduces the probability of 

conclusive findings. 

 C7.4.3.1. Storage activity preadjustment research must be completed and the physical 

inventory adjustment/completion action posted to the owner/manager record within 30 calendar days 

from the PICD for scheduled inventories and 15 calendar days from the PICD for unscheduled 

inventories. 

 C7.4.3.2. The storage activity must complete mandatory causative research within 45 

calendar days from the date the adjustment transaction was posted. If sample causative research is 

used as allowed by the Figure C7.F.1, Minimum Research Requirements, the sample causative 

research must be completed within 45 calendar days from the date the sample causative research 

listing is created. 

 C7.4.4. Transaction History Requests. For intra-Component (or inter-Component, based on 

agreement of the DoD Components involved) reconciliation, the owner/manager may request 

transaction history for analyzing inventory discrepancies. 

 C7.4.4.1. The owner/manager shall request the history using a DI Code DZJ Transaction 

History/Custodial Balance Request, prepared in the appendix AP3.64 format, citing in record position 

7 the appropriate type of physical inventory/transaction history code from appendix AP2.2. 

Transaction history shall consist of all transactions affecting the balance for the requested timeframe. 

 C7.4.4.2. The storage activity shall provide the transaction history data using the DI Code 

DZK, Transaction History Transmittal, prepared in the appendix AP3.65 format. Transmit the history 

using the media specified by the type of media code (see appendix AP2.15) entered in record position 

60 of the DI Code DZJ request. 

 C7.4.5. Error Classification Coding for Physical Inventory Adjustments. Causes of 

potential/actual inventory adjustments are determined by research. Causes shall be classified, 

analyzed, and evaluated so action may be taken to correct situations that are causing the errors. 

Inventory Adjustment (Physical Inventory) Error Classification Codes shall be entered in positions 

63-65 of DI Code D8A/D9A Inventory Adjustment (Physical Inventory) Transactions4

. For analysis 

and evaluation, physical inventory adjustment error conditions shall be identified to the operation in 

which they occurred (e.g., receiving, issue, etc.) and classified by type within each operation. For 

reporting purposes, each operation and each error type have been identified by an alphabetic or 

 

4

 The Integrated Materiel owner/manager may use AP2.16B Inventory Adjustment (Accounting Error) Error 

Classification Codes in record positions 63-65 in DI Codes D8B/D9B Inventory Adjustment (Accounting Error) 

Transactions pending the establishment of single shared asset balances (see paragraphs C7.2.2 and C7.2.4.). 
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numeric code as shown in appendix AP2.16A. The error classification system is structured to provide 

the DoD Components the latitude to amplify the DoD defined error classifications; however, DoD 

Components shall summarize internally defined error classifications to the appropriate DoD 

classification for all reports provided to higher authorities, auditors, etc. 

 C7.4.6. Error Classification Feedback and Correction [NOTE: Bold blue text reflects ADC 

255 approved changes and is not impacted by ADC 414] 

 C7.4.6.1. Causative History Summary. Storage activities shall send a quarterly summary 

of the causative research results for each individual NIIN to the Inventory Owners (or the service 

International Logistics Control Activity in the case of FMS-owned materiel). The summary 

information shall be provided for all adjustments of extended dollar value greater than $16K 

and any adjustment of an item with a CIIC code that is Classified, Sensitive or Pilferable. As a 

minimum, the summary provided shall include, for each NIIN: supply condition code, DLMS 

947I or MILSTRAP DI Code D8_ or D9_, quantity adjusted, routing identifier (RI) code of the 

storage activity making the adjustment, error classification code, controlled inventory item 

code, date created, date completed, and total adjusted dollar value.

C7.4.6.2. Error Correction. 

C7.4.6.2.1. Storage Activity Commanders. Commanders at the storage 

activities shall use this information to identify and correct recurring errors in their 

operations (e.g., through established depot training programs, quality control checks and 

other actions as required). 

C7.4.6.2.2. Inventory Owners. Inventory Owners shall use this information 

as a means to gain insight into the adjustments and subsequent actions taken to resolve the 

error and to evaluate whether changes in procurement practices, cataloging data or other 

actions may be taken to prevent potential distribution errors. A single point of contact shall 

be designated at the owner level to request information from DLA. 

 C7.4.7. Controlled Inventory Item Adjustments. Unresolved physical inventory adjustments for 

all classified and sensitive items regardless of value, and for pilferable items when the adjustment is 

in excess of $2,500, as prescribed by DoD 7000.14-R, shall be referred to security officials of the 

storage activity at which the adjustment occurred to determine whether there is culpability or when 

fraud, waste, or abuse is suspected (see table C7.T2). 

 C7.4.8. Materiel Release Denials. MILSTRIP (DoD 4000.25-1-M) prescribes DoD standard 

document formats, data codes, and criteria for the preparation and processing of materiel release 

denials at storage activities and inventory control points. 

 C7.4.8.1. Upon initiation of a materiel release denial citing Management Code 1, 2, 3 

(applies to subsistence only), or 4 (applies to subsistence and ammunition only), storage activities 

shall: 

 C7.4.8.1.1. Reverse the issue, adjust the storage activity record on-hand 

quantitative balance to zero, and transmit a DI Code D9A for the adjusted quantity to the 

owner/manager attempting to issue the materiel, citing denial Management Code 1, 2, 3, or 4, and a 

DI Code D9A to any other owners affected by the denial loss, citing denial Management Code Q. 

 C7.4.8.1.2. Initiate a spot inventory as required under paragraph C7.3.4.2 of this 

chapter. 

 C7.4.8.2. If an inventory can be accomplished without delaying the processing of the 
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MILSTRAP Chapter 7 

Materiel Release Order beyond the prescribed UMMIPS timeframes (see DoD 4140.1-R), it may be 

conducted prior to processing a denial transaction. 

C7.5. REVERSAL OF INVENTORY ADJUSTMENTS (PHYISCAL INVENTORY)- DI CODE 

D8A/D9A. Storage activity reversal of DI Code D8A/D9A Inventory Adjustment (Physical 

Inventory) transactions is a required capability which must be implemented with proper controls and 

supported by proper documentation. (See appendix AP3, introduction, paragraph AP3.3.2., for 

processing adjustment reversals.) Procedures for reversing adjustments shall contain, as a minimum, 

the following control features: 

 C7.5.1. Posted/Unposted Source Documents. Reversals required to correct inventory records 

when posting previously unposted or incorrectly posted supply transactions (e.g., receipts, issues, 

etc.), regardless of age, are limited to those transactions that can be properly documented to 

reference the specific transaction document number(s) that shall be processed to offset the reversal. 

 C7.5.2. Inventory Adjustment Corrections. Reversals required to correct physical inventory 

adjustments which were made based on incorrect/incomplete information are limited to 2 years from 

the date of the original adjustment unless the requirements of paragraph C7.5.1., are met. All 

reversals must be properly documented. 

 C7.5.3. Limitations. Reversals shall not be processed solely on the basis of a previous 

offsetting physical inventory adjustment. 

 C7.5.4. Performance Assessment. Reversals against transactions processed within the 

adjustment period shall be separated and identified as follows: 

 C7.5.4.1. Gross adjustment during the current period, 

 C7.5.4.2. Reversal of prior quarters' adjustment transactions, 

 C7.5.4.3. Reversal of current quarters' adjustment transactions, and 

 C7.5.4.4. Total value of net adjustments during the current period (i.e., value of net gains 

added to value of net losses). 

C7.6. RESEARCH OF POTENTIAL OR ACTUAL INVENTORY ADJUSTMENTS (ACCOUNTING 

ERRORS) - DI CODE D8B/D9B5

 C7.6.1. Policy. DoD Components shall ensure that potential or actual Inventory 

Adjustments (Accounting Errors), D8B/D9B, are researched in accordance with the value of 

the adjustment and type of item involved. The DoD criteria for this research are set forth table 

C7.T2. and shall be used as the basis for selective research for supply system materiel. More 

stringent research requirements may be imposed by DoD Components based upon the limits 

of resources available and upon specific asset control problems. While physical inventory 

adjustments are based on physical counts, accounting adjustments are based on the 

reconciliation of inventory records, as part of an End-of-Day or Location Reconciliation 

business processes. When differences exist between the ‘systems’ an accounting adjustment 

(gain/loss) (DI Code D8B/D9B) shall be created to adjust the owner/manager’s Total Item 

Property Record (TIPR) inventory balance to agree with the storage activity’s closing end of 

day balance. As such, the causes of accounting adjustments are driven by the handling of 

‘transaction data’ versus the physical handling of materiel. Therefore, research requirements 

 

5

 Refer to ADC 414 available at: https://www.dla.mil/j-6/dlmso/eLibrary/changes/processchanges.asp 
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shall focus on events/processes that cause the databases (between the storage activity and 

TIPR) to be out of sync. DoD Components shall research transaction histories and violation 

files to locate ‘missing’ supply transactions, clear exceptions, process the appropriate 

‘supply’ transaction and reverse the accounting adjustment to resolve the original mismatch 

condition. 

 C7.6.1.1. When subsequent research finds that the accounting adjustment was 

caused by an unposted, duplicate, or otherwise improperly posted transaction, a reversal of 

the accounting adjustment and (as appropriate) the incorrectly posted ‘supply’ transaction is 

required. The owner/manager shall ensure that proper audit trails are maintained to reflect the 

posting of the correct supply transaction. 

 C7.6.1.2. Owners/managers shall request assistance from the storage activity to 

isolate supply transaction processing errors and focus on data transmission and validation of 

system logic to resolve causes of database mismatches. 

 C7.6.2. Objectives. Analysis of Inventory Adjustments (Accounting Errors) is vital in 

order to: 

 C7.6.2.1. Identify failures in the control systems so improvements can be made. 

 C7.6.2.2. Reduce similar discrepancies in the future. 

 C7.6.2.3. Ensure that the proper adjustment was made. 

 C7.6.2.4. Evaluate indicators of trends or system problems for corrective action. 

 C7.6.3. Timeliness of Research. Timely completion of the research of potential or 

actual Inventory Adjustments (Accounting Error) is essential. Delay only increases the 

complexities of adequate research and reduces the probability of conclusive findings. 

C7.6.3.1. Mandatory Causative Research. The owners/managers must complete 

mandatory causative research within 45 calendar days from the date the adjustment 

transaction was posted. 

 

C7.6.3.2. Sample Causative Research If sample causative research is used as 

allowed by the Figure C7.F.1, Minimum Research Requirements, owners/managers must 

complete the sample causative research within 45 calendar days from the date the sample 

causative research listing is created. 

 

 C7.6.4. Inventory Adjustment (Accounting Error) Error Classification Coding. Causes of 

potential/actual Inventory Adjustments (Accounting Error) are determined by research. 

Causes shall be classified, analyzed, and evaluated so action may be taken to correct 

situations that are causing the errors6

. For analysis and evaluation, error conditions shall be 

identified and classified by type. For reporting purposes, each error type is identified by an 

alphabetic or numeric code as shown in appendix AP2.16B. The error classification system is 

structured to provide the DoD Components the latitude to amplify the DoD defined error 

classifications; however, DoD Components shall summarize internally defined error 

classifications to the appropriate DoD classification for all reports provided to higher 

 

6

 The owner/manager may use the AP2.16B Inventory Adjustment (Accounting Error) Error Classification 

Codes in record positions 63-65 in DI Codes D8B/D9B Inventory Adjustment (Accounting Error) Transactions 

pending the establishment of single shared asset balances (see paragraphs C7.2.2 and C7.2.4.). 
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ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

authorities, auditors, etc. 

 C7.6.5. Error Classification Feedback and Correction 

 C7.6.5.1. Causative History Summary. Owners/managers shall prepare a quarterly 

summary of causative research results for inventory Adjustments (Accounting Error) (DI Code 

D8B/D9B) and provide feedback to the appropriate owners/managers officials. 

 C7.6.5.2. Error Correction. Inventory Owners shall use this information as a 

means to gain insight into the inventory accounting adjustments and subsequent actions 

taken to resolve the error and to evaluate whether changes in supply transaction ‘edits’, 

cataloging data or other actions may be taken to prevent potential inventory accounting 

errors. A single point of contact shall be designated at the owner level to request 

information from DLA. 

 C7.6.6. Controlled Inventory Item Accounting Adjustments. Unresolved Inventory 

Adjustments (Accounting Error) for all classified and sensitive items regardless of value, and 

for pilferable items when the adjustment is in excess of $2,500, as prescribed by DoD 7000.14-

R, shall be referred to security officials of the storage activity at which the adjustment 

occurred to determine whether there is culpability or when fraud, waste, or abuse is suspected 

(see table C7.T2). 

C7.7. REVERSAL OF INVENTORY ADJUSTMENT (ACCOUNTING ERRORS) TRANSACTIONS. 

Reversal of DI Code D8B/D9B inventory accounting adjustments is a required capability which 

must be implemented with proper controls and supported by proper documentation. (See 

appendix AP3, introduction, paragraph AP3.3.2, for processing adjustment reversals.) 

Procedures for reversing adjustments shall contain, as a minimum, the following control 

features: 

 C7.7.1. Posted/Unposted Source Documents. Reversals required to correct inventory 

accounting records when posting previously unposted or incorrectly posted supply 

transactions (e.g., receipts, issues, etc.), regardless of age, are limited to those transactions 

that can be properly documented to reference the specific transaction document number(s) 

that shall be processed to offset the reversal. 

C7.7.2. Inventory Accounting Adjustment Corrections. Reversals required to correct 

inventory accounting adjustments which were made based on incorrect/incomplete 

information are limited to 2 years from the date of the original adjustment unless the 

requirements of paragraph C7.5.1., are met. All reversals must be properly documented. 

 C7.7.3. Limitations. Reversals shall not be processed solely on the basis of a previous 

offsetting inventory accounting adjustment. 

 C7.7.4. Performance Assessment. Reversals against transactions processed within the 

adjustment period shall be separated and identified as follows: 

 C7.7.4.1. Gross inventory accounting adjustment during the current period, 

 C7.7.4.2. Reversal of prior quarters' inventory accounting adjustment transactions, 

 C7.7.4.3. Reversal of current quarters' inventory accounting adjustment 

transactions, and 

 C7.7.4.4. Total value of net inventory accounting adjustments during the current 
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period (i.e., value of net gains added to value of net losses). 

C7.8. RECORD RECONCILIATION PROGRAM. Each DoD Component shall implement a location 

record reconciliation program which shall consist of both a location survey and a location 

reconciliation.7

 The DoD acceptable accuracy goals are provided in paragraph C7.2.12.3. The DoD 

Components may impose more stringent standards internally. The record reconciliation program is 

subject to the quality control checks delineated in section C7.10., Quality Control. Errors shall be 

subject to validation and research before they are counted as an error. DoD Components shall collect 

and analyze all type III errors (see paragraphs C7.8.1.8.3 and C7.8.2.2.3) by element. 

 C7.8.1. Location Survey

 C7.8.1.1. Location survey requires a physical verification, other than actual count, 

between physical assets and recorded location data to ensure that all assets are properly recorded. 

When a discrepancy is identified during the location survey program (type I or type II error (see 

paragraphs C7.8.1.8.1 and C7.8.1.8.2)), the storage activity shall conduct prompt research and 

determine the need for a special inventory (DI Code DJA request with Type of Physical 

Inventory/Transaction History Code K). In some instances, location survey and physical inventory 

shall be conducted concurrently for ammunition. 

 C7.8.1.2. Location survey shall be accomplished at each storage activity not less than 

once each fiscal year, by (1) performing complete location survey of all locations; (2) using a 

statistical sampling methodology that ensures all locations are included in the population and have a 

probability of selection; or (3) a combination of complete and statistical sampling. 

 C7.8.1.3. A location survey shall be conducted in both the gaining and losing storage 

areas following the accomplishment of re-warehousing projects. A location survey conducted as a 

result of re-warehousing projects may be considered to have satisfied the annual survey requirement 

for the area surveyed. 

 C7.8.1.4. The proper sequence of operating a location survey requires the comparing of 

assets in storage locations with locator records. This sequence of operation is important to detect 

assets in unrecorded locations. 

 C7.8.1.5. As an objective, it is desirable to identify items to location survey lots or 

segments. Lots/segments shall be of a manageable size (number of items) to permit location survey 

in a minimum time period, to ensure maximum uninterrupted service to customers, and to obtain the 

greatest degree of accuracy from the location survey. 

 C7.8.1.6. Items within a lot/segment which have been subject to a complete item inventory 

shall be considered to have satisfied the annual survey requirement when the entire lot/segment is 

located in a clearly designated, coterminous warehouse space. These inventoried lots/segments may 

be excluded from the complete survey for the fiscal year in which they were counted. 

 C7.8.1.7. When permanent locations are reserved for items, recorded locations which are 

unoccupied shall be identified and/or verified during the location survey. 

 C7.8.1.8. To measure the accuracy of the results of the location survey, discrepancies 

shall be classified in one of the three categories listed below. Only one error per stock number per 

location is charged when locator delete, locator establish, or locator record correction is required for 

 

7

 The location reconciliation process shall not be required with the establishment of single shared asset 

balances (see paragraphs C7.2.2 and C7.2.4.). 
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MILSTRAP Chapter 7 

the same location. When the stock number and actual assets differ, the discrepancy shall be 

classified as a locator establish action only. 

 C7.8.1.8.1. Locator Record Deleted. The removal or change of a locator record 

when there is a recorded location but there are no physical assets -- unless the location is being held 

open for new receipts. (Type I location survey error.) 

 C7.8.1.8.2. Locator Record Established. The recording of locations when assets are 

physically found in storage and no locator records exist, or when the recorded stock number 

disagrees with the materiel in the location. (Type II location survey error.) 

 C7.8.1.8.3. Locator Record Corrected. Changes to the locator record when physical 

materiel characteristics differ from any of the following data elements (Type III location survey error): 

 C7.8.1.8.3.1. Unit of issue. 

 C7.8.1.8.3.2. SCC. 

 C7.8.1.8.3.3. Controlled inventory item code (see DoD 4100.39-M, volume 10, 

table 61). Verification of the code shall consist of ensuring that assets are stored in areas providing 

the degree of security commensurate with the assigned code. 

 C7.8.1.8.3.4. Type of pack code (for subsistence only). (See MILSTRIP (DoD 

4000.25-1-M.) 

 C7.8.1.8.3.5. Lot number or serial number (for ammunition only). 

 C7.8.1.8.3.6. Completeness and accuracy of magazine data card (for 

ammunition only). 

 C7.8.1.8.3.7. To ensure accuracy of property accountability records, special 

inventories should be performed when assets are found in an erroneous or unrecorded location or 

when there are mismatches in the unit of issue that may result in a quantity variance. 

 C7.8.2. Location Reconciliation8

 C7.8.2.1. Location reconciliation requires a match between storage activity records and 

owner/manager records in order to identify and to correct situations when there is: (1) an owner/ 

manager record with no corresponding storage activity record, (2) a storage activity record with no 

corresponding owner/manager record, (3) common elements of data that do not match, and (4) 

quantity discrepancies. Mismatches shall be researched and special inventories conducted when 

required to effect corrective action. 

 C7.8.2.2. To measure the accuracy of the results of the location reconciliation program, 

discrepancies shall be classified in one of the four categories listed below (report only one error per 

location reconciliation request or unmatched accountable error): 

 C7.8.2.2.1. Owner/manager record reflects balance for storage activity; no location 

reconciliation transaction received. (Type I location reconciliation error.) 

 C7.8.2.2.2. Location reconciliation transaction received from storage activity; no 

 

8

The location reconciliation process shall not be required with the establishment of single shared asset balances (see 

paragraphs C7.2.2. and C7.2.4.). 
C7-17 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

corresponding owner/manager record. (Type II location reconciliation error.) 

 C7.8.2.2.3. Mismatch on any of the following data elements (Type III location 

reconciliation error): 

 C7.8.2.2.3.1. Unit of issue. 

 C7.8.2.2.3.2. Ownership/manager identifier. 

 C7.8.2.2.3.3. Controlled inventory item code (see DoD 4100.39-M, Volume 10, 

Table 61). 

 C7.8.2.2.3.4. Type of pack code (subsistence only). 

 C7.8.2.2.3.5. Shelf-life code. 

 C7.8.2.2.3.6. Date packed/expiration date (subsistence only). 

 C7.8.2.2.4. Quantity discrepancy. (Type IV location reconciliation error.) 

 C7.8.2.3. Location reconciliation shall be accomplished by DoD Components in 

accordance with the following guidance: 

 C7.8.2.3.1. Owners/managers and storage activities shall reconcile all records 

annually. The reconciliation shall be performed prior to the Chief Financial Officer inventories 

in September. The annual reconciliation shall be accomplished in accordance with paragraph 

C7.8.2.3.3. 

 C7.8.2.3.2. Storage activities shall prepare location reconciliation request 

transactions by line item, and by type of pack and date packed/expiration date for subsistence, for 

each stock number regardless of the balance (including zero balances). Location reconciliation 

requests shall be identified by DI Code DZH, prepared in the appendix AP3.63 format, using Type of 

Location Reconciliation Request Code 2 in record position 7, and transmitted to the owner/manager. 

Storage activities preparing DI Code DZH requests shall assure that consecutive transaction numbers 

by RI code are assigned to location reconciliation requests for control purposes. 

 C7.8.2.3.3. All owner/manager and storage activity records (active and inactive 

records, including zero balances) shall be reconciled not less than once each fiscal year. Storage 

activities and Components may negotiate agreements for conducting annual location reconciliation 

any time during the fiscal year. When no such agreement exists, location reconciliation requests shall 

be prepared on the second Tuesday of the month indicated in the following schedule: 

Service or Agency Preparation Date

Second Tuesday in: 

Army January 

Navy March 

Marine Corps May 

Air Force July 

Defense Logistics Agency September July 

NOTE (not for inclusion in MILSTRAP manual): change to July above accommodates DUSD(L&MR) 

response to DOD IG recommendation 1e, in which DUSD(L&MR) stated that scheduling annual inventory records 
C7-18 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

reconciliation during September would not allow the required 45 days for correcting errors before fiscal year’s end. 

DUSD(L&MR) recommended that the storage activities and inventory materiel managers perform the annual 

reconciliation of inventory records before storage activities perform their annual physical inventories.

 C7.8.2.3.4. Storage activities and owners/managers shall establish the following 

provisions for controlling location reconciliation: 

 C7.8.2.3.4.1. Storage activities shall advise intended recipients 

(owners/managers) of the number of transactions being forwarded, transmission date, and the 

medium (ex. DDN) using DI Code DZN Location Reconciliation Notification transaction (appendix 

AP3.67). 

 C7.8.2.3.4.2. Location Reconciliation Transaction History

 C7.8.2.3.4.2.1. When transaction history (DI Code DZK Transaction 

History Transmittal) is required to accompany DI Code DZH, the storage activity shall advise intended 

recipients (owners/managers) of the number of DI Code DZK transactions being forwarded, the cutoff 

date, and the medium (ex. DDN) using DI Code DZP Location Reconciliation History Notification 

transaction (appendix AP3.68). 

 C7.8.2.3.4.2.2. For transaction history associated with annual 

reconciliation, the owner/manager may cite Type of Physical Inventory/Transaction History Code Y in 

the DI Code DZJ Request for History. DLA owner/managers shall use code 'Y' for automatic 

submissions of history requests for the Annual (Total) Reconciliation, and code 'W' for automatic 

submissions of transaction history requests for their weekly process. 

 C7.8.2.3.4.3. Owners/managers shall use the DI Code DZN and DI Code DZP 

transactions to determine receipt of all DI Code DZH and DI Code DZK transactions. Where the 

number of DI Code DZH or DI Code DZK transactions to be transmitted does not match what was 

actually received, the owner/manager may reject the DI Code DZN or DI Code DZP transaction using 

DI Code DZG Transaction Reject with Reject Advice Code AY. 

 C7.8.2.3.5. In processing location reconciliation requests, owners/managers shall 

match the requests to the owner/manager records. When a mismatch is programmatically 

unresolved, DI Code D8B/D9B shall be processed to adjust the owner/manager records. All Type I, 

II, and IV mismatches meeting the criteria for causative research (see table C7.T2.) shall be resolved 

as follows: 

 C7.8.2.3.5.1. Research of owner/manager active and historical records. 

 C7.8.2.3.5.2. Research of storage activity active/historical record (DI Code 

DZJ, Transaction History Request, citing Type of Physical Inventory/Transaction History Code X). 

 C7.8.2.3.5.3. Request physical inventory (DI Code DJA, using Type of Physical 

Inventory/Transaction History Code J). 

 C7.8.2.3.5.4. If the above actions fail to resolve the mismatch, the DI Code 

D8B/D9B transaction shall remain on the owner/manager records. 

 C7.8.2.3.6. A physical inventory is not required under the following conditions, 

except when the mismatch involves classified, sensitive, or pilferable items when the extended dollar 

value of the variance is greater than $100. 
C7-19 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

 C7.8.2.3.6.1. The owner/manager record may be adjusted without special 

inventory when the extended value of the variance is $5,000 or less and 10 percent or less of the 

beginning value of the variant owner/manager record for Type IV, errors (see paragraph C7.8.2.2.4.). 

 C7.8.2.3.6.2. The owner/manager record may be adjusted without special 

inventory when the extended value of the variance is $5,000 or less for Type I and Type II errors (see 

paragraph C7.8.2.2.1. and C7.8.2.2.2.). 

 C7.8.2.3.7. When a discrepancy is identified during the location reconciliation 

program, transmit the following transactions, as appropriate, to the submitting activity: 

 C7.8.2.3.7.1. DI Code DZG Transaction Reject, as prescribed in 

chapter 9, prepared in the appendix AP3.62 format. 

 C7.8.2.3.7.2. DI Code DZB Storage Item Data Correction, as 

prescribed in chapter 10, prepared in the appendix AP3.57 format. 

C7.9. RETENTION OF ACCOUNTABLE DOCUMENTATION. Audit capability is required for a 

period of time following the processing of documents and data and completion of the research effort. 

The following retention criteria shall apply: 

 C7.9.1. Source Documents. Retain original source documents or facsimiles, i.e., microform 

(microfilm, microfiche), Compact Disk-Read Only Memory (CD-ROM), etc., for at least 2 years. 

Where source documents are produced, these include only accountability change documents such as 

receipts, issues, shipments, transfers, SCC changes, and inventory and financial adjustments. Retain 

source documents providing evidence of shipment to Foreign Military Sales recipients for 2 years from 

date of materiel shipment. 

 C7.9.2. Transaction Histories. Retain registers, records, files, tapes, and data for at least 2 

years in a format useful for audit trail purposes. Automated inventory control systems shall be 

designed to facilitate the printout of transaction histories which indicate the date the last physical 

inventory was conducted for each item. 

 C7.9.3. Adjustment Research. Retain backup documentation that directly pertains to individual 

cases of physical inventory adjustment research efforts for at least 2 years. 

 C7.9.4. Annual Statistical Sample. Retain the annual statistical sample inventory line item 

detail data for at least 2 years. 

C7.10. QUALITY CONTROL

 C7.10.1. Goals and Objectives. DoD Components shall establish a quality control program 

at each owner/manager and storage activity which encompasses the objectives of DoD 7000.14-R, 

and the physical inventory objectives contained in DoD 4140.1-R. Portions of the program can be 

accomplished during ongoing practices within inventory processes. Quality control results shall assist 

management in identifying those human, procedural, or system errors which adversely affect record 

accuracy and in achieving better control over physical materiel and warehousing practices. Within the 

scope of this quality control program, those work processes directly related to the control of physical 

materiel shall be monitored for attained quality levels and performance evaluated on improvements, 

not numerical goals. Accordingly, all quality control programs shall include reviews to assess the 

accuracy/quality of the following work processes: 

 C7.10.1.1. Warehousing practices -- to include checks of storage practices, stock rotation, 
C7-20 

ADC 414 Enclosure 1 

MILSTRAP Chapter 7 

shelf-life management, identification of materiel in store, mixed stock, location accuracy and rewarehousing projects. 

 C7.10.1.2. Receiving practices -- to include checks of documentation, materiel identity, 

quantity, and SCC; checks for processing timeliness; and verification of daily input data to the location 

system. 

 C7.10.1.3. Issuing practices -- to include checks of legibility of issue documents; accuracy 

of stock selection as to identity, quantity, unit of issue, shelf life, SCC, and type of pack (subsistence 

only); marking of outgoing shipments; and release to carriers. 

 C7.10.1.4. Validity of automated data -- to include checks of receipt, issue, and 

adjustment transaction data entries against input documentation. 

 C7.10.1.5. Inventory practices -- to include checks of inventory counts, location surveys, 

location reconciliation corrective actions, causative research, and adjustments at both the

owner/manager and storage activities. 

 C7.10.1.6. Catalog practices -- to include checks of catalog change processing, accuracy, 

and timeliness, using the affected recorded locations as the universe. 

 C7.10.1.7. Locator file updates -- to include checking the accuracy of changes posted to 

the locator file (e.g., all additions, deletions, and changes of unit of issue, SCC, shelf life, etc.). 

 C7.10.1.8. Report of discrepancy processing -- to include checks for processing timeliness 

and checking the accuracy of SDR initiation, follow up and reply, investigative research including 

identification and correction of supply errors, adjustment of accountable and financial records, and 

preparation of financial liability investigation of property loss reports (DD Form 200). 

 C7.10.1.9. Logistics reassignment processing -- checks to determine if the logistic 

reassignment actions were completed; e.g., LIM/GIM records were changed to reflect 

decapitalization/ transfer, LIM directed the storage activity to change the decapitalized/ transferred 

assets to GIM ownership, the storage activity effected and advised the LIM of the change, and the 

LIM initiated action to resolve any quantity variances. 

 C7.10.1.10. Suspended asset processing -- to include checks of the timeliness in 

reclassifying suspended (SCCs J, K, L, Q, and R) materiel. 

 C7.10.2. Assignment of Responsibility. Whenever possible, quality control checks of these 

work processes shall include identification of the individual performing the tasks. This shall facilitate 

the placement of responsibility for appraising and improving quality with each manager within the 

chain of command. 

 C7.10.3. Command Emphasis. Continued command management emphasis and review of 

performance are essential for the success of the quality control program. Command managers must 

ensure effective organizational interrelationships among the functional elements concerned with the 

PICP such as: comptroller, data systems, transportation, warehousing, maintenance, quality control, 

and supply management. The quality control program shall include provisions for initiation of 

corrective action when acceptable quality levels are not met. 

C7.11. PICP PERFORMANCE ASSESSMENT...Renumber remaining Chapter 7 paragraphs
AP2.16B-1 

ADC 414 

Enclosure 2 

AP 2.16B 

ENCLOSURE 2 to ADC 414 

Changes from current AP 2.16 Error Classification Codes are shown in red, bold, 

italicized text. 

AP2.16B APPENDIX 2.16B 

INVENTORY ADJUSTMENT - ACCOUNTING ERROR 

CLASSIFICATION CODES

NUMBER OF CHARACTERS: Three 

TYPE OF CODE: Alpha/Numeric 

EXPLANATION: Provides processing activities a means of mechanically 

identifying the causes for errors which resulted in 

potential/actual inventory adjustment (accounting error) 

transactions,

1 and the processing operations in which they 

occurred 

DLSS RECORD POSITIONS: 

DLMS SEGMENT/QUALIFIER:

rp 63-65 of Inventory Adjustment (Accounting Error) 

transaction (DI Code D8B/D9B) 

DLMS 947I LQ segment, LQ01 qualifier ‘ACC’ used with 

W19 segment, W1901 Quantity or Status Adjustment Reason 

Code ‘AB-Accounting Error’ 

AP2.16B.1 PURPOSE 

AP2.16B.1.1 The physical inventory program error classification codes for accounting error 

inventory adjustments (DI Code D8B/B9B) provide a standard means for DoD Components to 

classify the causes of actual/potential accounting error inventory adjustments for subsequent 

analysis, evaluation, and corrective action. 

AP2.16B.1.2 The error classification code is a required entry on MILSTRAP documentation for 

use in preparing reports and for providing evaluation data to higher authority in standard error 

classification categories. 

 

 

1

 The Integrated Materiel Manager owner/manager may use the Inventory Adjustment –Accounting Error 

Classification Codes in rp 63-65 in DI D8B/D9B Inventory Adjustment Transactions (Accounting Errors) pending 

the establishment of single shared asset balances (see chapter 7). 
AP2.16B-2 

ADC 414 Enclosure 2 

MILSTRAP AP2.16B 

AP2.16B.2 CODE STRUCTURE 

AP2.16B.2.1 First Position. The first character shall be numeric or alphabetic and shall 

identify the type of transaction during which the error occurred. Code assignment for the first 

character is controlled by DoD and may not be assigned by the DoD Components. The following 

operation codes are assigned as the first character in the error classification code: 

CODE OPERATION CODE OPERATION

0 Not assigned; reserved for future 

assignment by DoD 

6 Condition Code Transfer (DAC) 

1 Receipt (D4_/D6_) 7 Not Assigned 

2 Issue (D7_/A5_) 8 Other 

3 Physical Inventory (D8A/D9A) 9 Not assigned; reserved for future 

assignment by DoD 

4 Cataloging Changes A-Z Not assigned; reserved for future 

assignment by DoD 

5 Logistics Reassignments 

 AP.16B.2.2 Second Position. The second character is alphabetic or numeric and identifies 

the type of error which occurred. Code assignment for the second character is controlled by DoD 

and may not be assigned by the DoD Components. The following type of error codes are assigned 

as the second character in the error classification code:

CODE LEGEND DEFINITION

A System/Program Error Total Item Property Record (TIPR) was not correctly updated by a valid 

transaction because system failed or program contained a logic error 

B Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

C Source Transaction Error Error in the source transaction NSN, quantity, unit of issue, condition, type 

of pack, lot number, ownership/ purpose, and/or location (routing 

identifier) caused erroneous update of TIPR

D Data Entry Error Input transaction did not match source transaction NSN, quantity, unit of 

issue, condition, type of pack, lot number, ownership/purpose, and/or 

location (routing identifier) and caused erroneous update of the TIPR

E Rejected Document Not 

Posted 

Transaction was rejected during processing and was not reinput to update 

the TIPR

F Duplicate Document 

Posted 

Same transaction updated the TIPR more than once 

G Reversal Document Not 

Posted 

TIPR was not updated by a reversal transaction processed and transmitted 

by the storage activity. 
AP2.16B-2 

ADC 414 Enclosure 2 

MILSTRAP AP2.16B 

CODE LEGEND DEFINITION

H Erroneous Reversal 

Posted 

Prior action to reverse a transaction which updated the TIPR was taken in 

error 

I Not Assigned 

J Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

K Duplicate Physical 

Processing 

Transaction updated the TIPR once but inventory accounting adjustment 

processed more than once 

L Not Assigned Not assigned for Inventory Adjustment (Accounting Error) 

M Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

N Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

O Not Assigned 

P Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

Q Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

R Infloat Transaction 

Control Error 

Erroneous adjustment posted to the TIPR because infloat transactions

were not considered or were not available 

S Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

T Erroneous Inventory 

Adjustment (Accounting 

Error) Posted 

Prior action to adjust the TIPR was taken in error 

U Catalog Change Not 

Posted 

Transaction resulted in erroneous update of the TIPR because the 

inventory accounting record was not updated by catalog change transaction 

V Erroneous Catalog 

Change Posted 

Erroneous data posted to TIPR due to error in catalog change record due to 

error in catalog change transaction (e.g., wrong unit of issue to or from, 

etc.) 

W Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

X Not Assigned Not assigned for Inventory Adjustment (Accounting Error)

Y No Conclusive Findings Cause for the inventory adjustment (accounting error) could not be 

determined 

Z Not Assigned Reserved for future DoD assignment 

0-9 Not Assigned Reserved for future DoD assignment 

Third Position. The third character may be assigned by each Component to internally amplify the error 

classification. Numeric and alphabetic code assignments in this position shall be controlled by each individual 

Component for their internal use. 
1of 7 

ADC 414 

Enclosure 3 

PDC 431A Comment Resolution 

ENCLOSURE 3 to ADC 414 

PDC 341A Comment Resolution 

# COMPONENT PDC 341A COMMENT/RESPONSE 

1 DLA Log Mgt 

Stds Office 

March 2011 

M.J. Johnson 

MILSTRAP 

Administrator/ 

Supply PRC 

Co-Chair 

One of the DOD IG recommendations was to: 

“d. Require the national inventory managers to follow the same guidance and criteria for researching 

accounting adjustments resulting from both the annual and the end-of-day inventory reconciliations.” 

Added new paragraph C7.2.6.4: “C7.2.6.4. Owner/managers shall refer to section C7.6 for 

guidance on research of Inventory Adjustments (Accounting Error) (D8B/D9B).” 

RATIONALE: To link the end of day process to the new section C7.6 that was written for the 

research of Inventory Adjustments (Accounting Error) (D8B/D9B). 

2 DLA 

March 2011 

Comments 

Gary Zeigler 

DLA JPIWG 

Representative 

and Gregg Feie 

DDC 

Revise paragraph C7.2.6.5, last sentence:

FROM: Owners/managers shall request assistance from the storage activity to isolate causes of 

record imbalances to maintain transaction level integrity. The storage activity assistance should 

focus on data transmission, e.g., lost transactions, etc.

TO: Owners/managers shall request assistance from the storage activity to isolate causes of 

record imbalances to maintain transaction level integrity. Owners/managers shall input DI 

Code DZJ, Transaction History Request to the storage activity assistance should focus on for

data transmission, e.g., lost transactions, etc. 

COMMENT DISPOSITION: Proposed change not incorporated at this time as part of ADC 414. 

DLA Logistics Management Standards Office recommends this change be submitted via a new PDC for 

Component review, along with the next 2 comments below. 

3 Revise paragraph C7.4.3.2, last sentence: 

C7.4.3.2. The storage activity must complete mandatory causative research within 45 calendar days from 

the date the adjustment transaction was posted. If sample causative research is used as allowed by the 

Figure C7.F.1, Minimum Research Requirements, the sample causative research must be completed 

within 45 calendar days from the date the sample causative research listing adjustment voucher is created. 

RATIONALE: There isn’t a sample adjustment voucher “listing”. 

COMMENT DISPOSITION: Proposed change not incorporated at this time as part of ADC 414. 

DLA Logistics Management Standards Office recommends this change be submitted via a new PDC for 

Component review. Comment is not directly related to PDC 341A and the associated DOD IG Report 

recommendations, so it would be inappropriate to make the change as part of this ADC. Further, 

MILSTRAP Chapter 7 is written for use by all Components, so the proposed verbiage should be 

reviewed/commented on the Services so that a common/generic term is used. The term “adjustment 

voucher” is not defined or used in MILSTRAP/DLMS and may be unique to DLA DSS.

4 Revise paragraph C7.6.3, last sentence: 

C7.6.3. Timeliness of Research. Timely completion of the research of potential or actual Inventory 

Adjustments (Accounting Error) is essential. Delay only increases the complexities of adequate research 

and reduces the probability of conclusive findings. The owners/managers, must complete mandatory 

causative research within 45 calendar days from the date the adjustment transaction was posted. If 

sample causative research is used as allowed by the Figure C7.F.1, Minimum Research Requirements, the 

sample causative research must be completed within 45 calendar days from the date the sample causative 

research listing adjustment voucher is created. 

RATIONALE: There isn’t a sample adjustment voucher “listing”. 

COMMENT DISPOSITION: Proposed change not incorporated at this time as part of ADC 414. 

DLA Logistics Management Standards Office recommends this change be submitted via a new PDC. See 

COMMENT DISPOSITION above; the term “adjustment voucher” is not defined or used in 

MILSTRAP/DLMS and may be unique to DLA DSS. 
2 of 7 

ADC 414 

Enclosure 3 

PDC 341A Comments 

# COMPONENT PDC 341A COMMENT/RESPONSE 

5 Revise paragraph C7.8.2.3.5. 

FROM: “In processing location reconciliation requests, owners/managers shall match the 

requests to the owner/manager records. When a mismatch is programmatically unresolved, DI 

Code D8B/D9B shall be processed to adjust the owner/manager records. All Type I, II, and IV 

mismatches meeting the criteria for causative research (see table C7.T2.) shall be resolved as 

follows:” 

DLA RECOMMENDATION: "In processing location reconciliation requests, owners/managers 

shall match the requests to the owner/manager Storage Activities records. When a mismatch is 

programmatically unresolved, DI Code D8B/D9B shall be processed to adjust the owner/manager 

records. All Type I, II, and IV mismatches meeting the criteria for causative research (see table 

C7.T2.) shall be resolved as follows:” 

DLA Log Mgt Stds Office suggestion: “In processing location reconciliation requests, 

owners/managers shall match the transactional and balance information provided by the storage 

activity to its records to ensure that the owner/manager transactional and balance records 

agree with those of the storage activity. “ 

COMMENT DISPOSITION: Proposed change not incorporated at this time as part of ADC 

414. DLA Logistics Management Standards Office recommends this change be submitted via a 

new PDC for Component review. 

6 DLA 2009 

Comments 

Terry 

Simpson 

DLA JPIWG 

Representative

The Services’ will need to provide a schedule for their reconciliation dates to DDC prior to the 

beginning of the fiscal year. Due to the requirement to have the reconciliation performed as close 

to the end of the fiscal year and prior to the Chief Financial Officers Inventory while allowing the 

Services 45 days for record corrections, DDC recommends the reconciliations be staggered during 

the first two weeks of July. 

Additional 7/21/09 comment: We also need to ensure that we capture or update the schedule to 

reflect the correct timeframe when the Annual reconciliation will be performed. DLA is 

suggesting that this process begin in July and each owner is staggered until complete. 

Also due to the timeframe required for approval and implementation of this PDC, recommend 

effective date by FY10. 

Section C7.2.6.4. should be written as "Owners/managers will input DZJ's to the storage activity 

for data transmission, e.g., lost transactions, etc." 

Section C7.4.3.2. should be written as "Owners/managers, must complete mandatory causative 

research within 45 calendar days from the date the adjustment transaction was posted. If sample 

causative research is used as allowed by the Figure C7.F.1, Minimum Research Requirements, the 

sample causative research must be completed within 45 calendar days from the date the sample 

causative research listing is created." 

Section C7.4.6.1 should be written as "Storage activities shall send a quarterly summary of the 

causative research results for each individual NIIN to the Inventory Owners." 

DLA Logistics Management Standards Office Response 2/24/2011: 

 Changes suggested by DLA to C7.2.6.4 and C7.4.6.1 are reflected in this ADC. 

 Nonconcur with change to C7.4.3.2. This section is addressing a storage activity 

requirement.     
3 of 7 

ADC 414 

Enclosure 3 

PDC 341A Comments 

# COMPONENT PDC 341A COMMENT/RESPONSE 

7 Army 

Comments 

2009 

Sarah Cook 

Supply PRC 

Representative

1. Army (National Level Community) concurs with PDC 341A. 

2. For detail, please see the following comments: 

 a. SCE BTL - concurs in the PDC, with the following comments: "We (CECOM and AMCOM 

at this time, and TACOM and JMC after LMP D3) do not have the ability to post reversal 

transactions in LMP. Changes to LMP will be required to enable us to reverse D9B/D8B 

adjustments once it's determined what caused the initial "B" adjustment posting. Due to known 

significant ongoing changes in LMP, the volume of D9B/D8B adjustments will currently prohibit 

CECOM from performing causative research on all "B" adjustments. At this time, CECOM 

recommends performing causative research on a sampling of the "B" adjustments. Note: LMP 

does not currently include the catalog data in our audits." 

 b. LOGSA - Concurs, no impact. 

c. AMMO - Concur, no impact 

DLA Logistics Management Standards Office Response: Reversal capability is required by 

MILSTRAP/DLMS policy for select MILSTRAP/DLMS transactions. At the NOV 17-19, 2009, 

JPIWG Meeting, Army was tasked to provide status update on ability to accomplish reversals in 

Army LMP.

8 Navy 

2009 

Emily 

Chiboroski 

Navy JPIWG 

Representative 

Michael Morra 

Navy 

Supply PRC 

Representative

“C7.6.1. Policy. DoD Components shall ensure that potential or actual Inventory Adjustments 

(Accounting Errors) are researched in accordance with the value of the adjustment and type of 

item involved. The DoD criteria for this research are set forth table C7.T2. and shall be used as 

the basis for selective research for supply system materiel. More stringent research requirements 

may be imposed by DoD Components based upon the limits of resources available and upon 

specific asset control problems. While physical inventory adjustments are based on physical 

counts, accounting adjustments are based on the reconciliation of inventory records, as part of an 

End-of-Day or Location Reconciliation business processes. When differences exist between the 

‘systems’ an accounting adjustment (gain/loss) (DI Code D8B/D9B) shall be created to adjust the 

owner/manager’s Total Item Property Record (TIPR) inventory balance to agree with the storage 

activity’s closing end of day balance. As such the causes of accounting adjustments are driven by 

the handling of ‘transaction data’ versus the physical handling of materiel. Therefore, research 

requirements shall focus on events/processes that cause the databases (between the storage 

activity and TIPR) to be out of sync. DoD Components shall research transaction histories and 

violation files to locate ‘missing’ supply transactions, clear exceptions, process the appropriate 

‘supply’ transaction and reverse the accounting adjustment to resolve the original mismatch

condition.” 

Navy Comment: It is the Navy policy to research and resolve all unreconciled balances 

generated from end of day processing and annual reconciliations. 

9 C7.6.4. Inventory Adjustment (Accounting Error) Error Classification Coding 

Inventory Adjustment (Accounting Error) Error Classification Coding. “Causes of 

potential/actual Inventory Adjustments (Accounting Error) are determined by research. Causes 

shall be classified, analyzed, and evaluated so action may be taken to correct situations that are 

causing the errors. For analysis and evaluation, error conditions shall be identified and classified 

by type. For reporting purposes, each error type is identified by an alphabetic or numeric code as 

shown in appendix AP2.16B. The error classification system is structured to provide the DoD 

Components the latitude to amplify the DoD defined error classifications; however, DoD 

Components shall summarize internally defined error classifications to the appropriate DoD 
4 of 7 

ADC 414 

Enclosure 3 

PDC 341A Comments 

# COMPONENT PDC 341A COMMENT/RESPONSE 

classification for all reports provided to higher authorities, auditors, etc.” 

Navy Comment: Both Navy legacy and future ERP systems would require changes to input an 

error classification code. No changes are being made to legacy systems and the ERP design is 

final. The Navy will continue to evaluate this requirement and incorporated into a later spiral of 

ERP if required. 

Also of note, the Navy assigns errors to TIRs that fail to process. Failed TIRs are often the source 

of unreconciled balances. These errors are monitored to identify problems with reporting 

activities. 

10 “C7.8.2.3.1. Owners/managers and storage activities shall reconcile all records annually. 

The reconciliation shall be performed prior to the Chief Financial Officer inventories in 

September. The annual reconciliation shall be accomplished in accordance with 

paragraph C7.8.2.3.3.” 

Navy Comment: Location reconciliations are scheduled throughout the fiscal year to 

manage workload. Manpower constraints will not allow all the reconciliations to be 

performed immediately prior to the CFO inventories. 

DLA Logistics Management Standards Office Response 7/21/09: 

 C7.8.2.3.3 states that “storage activities and Components may negotiate agreements 

for conducting annual location reconciliation any time during the fiscal year.” Any 

agreements should allow for sufficient lead time to comply with the Chief Financial 

Officers Act requirements. 

11 Marine 

Corps 

2009 

Sam Perez 

Supply PRC 

and JPIWG 

Representative

Marine Corps Comment. Concur with Navy position. 

Changes to USMC retail and wholesale Inventory Balance/systems require that Inventory 

Gain or Lose transactions be reconciled before they are generated and vouchered 

appropriately. 

The requirements of PDC 341A would also require modifications to USMC legacy 

LogAIS. No changes will be made to legacy USMC LogAIS. USMC will continue to 

monitor and evaluate this requirement for incorporation into a later spiral release of 

GCSS-MC. 
5 of 7 

ADC 414 

Enclosure 3 

PDC 341A Comments 

# COMPONENT PDC 341A COMMENT/RESPONSE 

12 AIR FORCE 

28 MAR 2011 

Merita Briggs 

USAF JPIWG 

Representative 

MARCH 28, 2011 USAF RESPONSE (subsequent to March 10, 2011 JPIWG Meeting): 

USAF Talking Paper On 

Meeting ADC 414 Requirements 

BLUF 

HQ AFMC and AFGLSC concur with proposed policy change with comments 

 -- AFMC agrees with policy in Approved Defense Logistics Management Standard Change 

(ADC) 414 (Draft); however, unable to execute due to lack of resources as identified 

 -- Earliest date AFMC could comply with requirement is estimated at mid-2014 assuming 

funding is provided and ECSS implementation is not impacted 

Background 

- DoD has developed new requirement with regards to processing end-of-day inventory 

reconciliations between a storage site and the wholesale materiel owner 

-- Requirement driven by DoD Inspector General Report D-2008-090, Controls Over 

Reconciling Army Working Capital Fund Inventory Records, dated 13 May 08 

- Change requires new workload which is not currently resourced; AFGLSC will need 

to POM to meet new system and manpower requirements 

-- Implement daily inventory reconciliation between storage site and wholesale 

owner for any stock number with daily accountable transaction 

-- Perform annual inventory reconciliation for all items being stored at a storage site 

-- Perform causative research on any inventory adjustments generated as the result 

of this reconciliation that breach DoD or Service requirements for research 

- Air Force previously (1994 and 2005) transferred responsibility for retail inventory 

processes and associated personnel to DLA 

- AFGLSC system (D035) currently performs annual-type inventory reconciliation 

once per month, reconciling all balances 12 times per year; personnel do not research 

most inventory adjustments received from DSS 

Discussion 

- Recommended changes would require major modifications to the D035 software 

-- Daily reconciliations decisions process 

-- Automated research functions, the reports process, and assignment of error classification 

codes 

--- Estimated modification cost of $750K - $1.25M 

- Cryptologic Systems Division (CPSD), in San Antonio, TX, does have a reconciliation 

process between the D035A wholesale item manager and the Standard Base Supply System; 

however, it is a very manual intensive process 

 - CPSD implementing new Cryptologic Depot Accountability System; system being designed 

to send daily inventory updates to D035 for weekly reconciliation, modification required to 

accommodate changes for daily reconciliation; estimated cost/manpower can be provided 

once scope is identified 

Recommendation 

HQ AFMC concurs with comments as noted above. 
6 of 7 

ADC 414 

Enclosure 3 

PDC 341A Comments 

# COMPONENT PDC 341A COMMENT/RESPONSE 

UAF 2010 and 2009 comments provided below for historical comment trail. See page 4 for MAR 2011 comments 

13 Air Force 

11 FEB 2010 

Mel Cooper 

USAF JPIWG 

Representative 

[SEE USAF 

RESPONSE 

PROVIDED 

MAR 28, 2011

on page 4]

USAF RESPONSE, Feb 2010, SUBSEQUENT TO NOV 2009 JPIWG MEETING: 

On February 11, 2010, the Air Force provided responded to PDC 341A related Action Items 1a and 1b 

discussed at the November 2009 JPIWG meeting. The responses were contained in an Email from Materiel 

Management (402/SCMS/GUMC – AFGLSC): 

The following input was provided on Air Force Action items relevant to PDC 341A: 

1a. Action Item: Air force is tasked to verify whether the MILSTRAP/DLMS end of day location 

reconciliation requirements are being accommodated in their future modernized system/ERP. 

USAF RESPONSE 11 FEB 2010: The current process the Air Force uses to reconcile transaction 

has been baselined to our ERP. The process currently used provides the best use of Air Force 

resources at this time. When/if PDC 341A is approved, we will work with our ERP integration team 

to identify detailed requirements and work to include the end of day reconciliation requirements in 

to the ERP. 

1b. Action Item: Air Force was tasked to document how reversals will be handled in their future 

modernized system/ERP. USAF RESPONSE 11 FEB 2010: Currently the Air Force system will 

handle transaction reversals. The process used by our legacy systems has been baselined and included 

as part of our ERP requirement

14 2009 USAF 

Response 

Merry 

Wermund 

USAF JPIWG 

Representative 

INITIAL USAF COMMENTS TO PDC 341A PRIOR TO DISCUSSION OF PDC AT THE 

NOV 2009 JPIWG MEETNG: The Air Force non-concurs with the implementation of this 

proposed DLMS/MILSTRAP change. 

- AF disagrees with requirements of causative research to include the steps required and the timeliness 

to complete. The requirements in the new section of policy are similar to those required for physical 

inventory discrepancy research and adjustment reconciliation which need clarification in the 4000 and 

7000 series documentation. 

- PDC 341A is attempting to apply Causative Research procedures to the reconciliation of DSS with the 

Service systems. There are only a limited number of causes that can occur between two systems that would 

cause a discrepancy. Generally, these can be attributable to timing (i.e. batching), or transactions being 

exceptioned-out due to format errors or failing an edit check. In the majority of these instances, these will 

process in the next day or so, thereby “self reconcile”. 

- Applying causative research on a daily basis will result in a lot of unnecessary expenditure of manpower, 

and, in the final analysis, none of these actions are capable of “reaching back” to the basic Receive, Store, 

and Ship processes. 

- The purpose of Causative Research is to find the root cause of the process responsible for creating the 

discrepancy in the accountable system. This root cause analysis is designed to focus attention on those 

Receive, Store, and Ship processes that control the movement of property from/to/in the depots. With the 

implementation of DMRD 902, this responsibility was assumed by DLA. The Services have no recourse 

but to accept the balances that are maintained by the accountable system, in this case the DSS. 

Significant system changes would be required in order for the AF to effectively perform daily causative 

research on Inventory Adjustments (Accounting Errors-MISTRAP Document Identifier (DI) Codes 

D9B/D9B). Due to the AF’s future Enterprise Resource Planning (ERP) system development, the current 

AF legacy systems will not be changed. The AF future ERP system (Expeditionary Combat Support 

System (ECSS) will require enhancements to existing requirements. At this time, it is not known when the 

ECSS would be able to accommodate this DLMS change. 

DLA Logistics Management Standards Office Response:

At the NOV 17-19, 2009 JPIWG meeting, the above USAF response was discussed. ODASD(SCI) 

did not support USAF contention that the Services have no recourse but to accept the balances that are 

maintained by the accountable system, in this case the DSS, without appropriate research.
7 of 7 

ADC 414 

Enclosure 3 

PDC 341A Comments 

# COMPONENT PDC 341A COMMENT/RESPONSE 

15 DLA response 

to 2009 USAF 

comment

DLA General Comment on 11/9/09 In Response to AF Recommendations:

I think the intent of PDC 341A has been missed. This is not a DLA initiative, these policy changes 

are in response to recommendations by the DoDIG as a result of the audit on Army Working 

Capital Fund. Each Component (to include DLA) must comply with these requirements to 

reconcile our records.

16 2009 

Air Force

DLA 

AF Recommends: 

1. DLA host IPT to improve/clarify definitions and requirements for all types of research effecting 

physical inventory, warehouse validation and system to system reconciliation. This is required 

before requirements can be met for inventory reconciliation, let alone daily system reconciliation. 

DLA Response 11/9/09: DLA sees no need for an IPT. DLA can provide information on types of 

research performed on physical Inv Adjs. However, DLA has no involvement in USAF daily 

recons other than providing EOD balances.  

17 2009 

Air Force 

DLA 

AF Recommends: 

2. DLA to work with AF to investigate the functionality of the EOD DZH REQUIRED field 

associated with the AF EOD process. If the functionality is actually “turned off” for the AF, the ability 

and functionality of “turning it on” would have to be tested and reviewed. 

DLA Response 11/9/09: DLA has no visibility into AF systems; DLA can explain how this 

functionality works in DSS and the required DLMS format but not how the AF system is programmed. 

When DLA says the functionality is "turned off" we mean within the AF system, not DSS. 

DLA Response on 7/21/09 to AF Recommendation 2 above: 

...wanted to follow-up on an AF comment. DLA would like to confirm and or discuss the AF's 

limitations in accepting EOD transactions. A few years ago, AF was receiving EOD transactions and 

requested DLA alter the Owner Compliance Table to send these transactions monthly. This scheduling 

process is very labor intensive and consumes valuable system resources. We believe all that is 

required, is to set the EOD DZH REQUIRED field to "Y" for all AF owners to turn on the EOD 

process. The only difference between the EOD DZH format and the Annual DZH format is in cc 7. 

For the EOD DZH a "1" indentifies an EOD transaction and a "2" indentifies the annual transaction. 

We recommend turning the EOD process back on for all AF owners. We'd also like to perform a small 

test at a single AF site to see if EOD transactions can be excepted. 

DLA Logistics Management Standards Office Response: 

MILSTRAP/DLMS requires an end of day reconciliation process in the absence of a single shared 

asset balance between the ICP and the depot. There is no provision for a monthly process.

18 2009 

Air Force

DLA 

AF Recommends: 

3. DLA conduct a cost benefit analysis prior to implementation, to analyze the potential to 

perform sample research rather than 100% daily research on all candidate accounting errors. 

DLA Response on 11/09/09: DLA has no role in how the Services perform this function as outlined 

in PDC 341A. Again this is the Services' reconciling the supply system records (balance information 

received from DSS) with their financial records. This is an individual Service responsibility and DLA 

will not/cannot conduct a cost benefit analysis to determine the cost to each Service for performing 

work that is their responsibility. 

DLA Logistics Management Standards Office Response:

PDC 341A is not a DLA initiative, it is the result of a DODIG Audit Report recommendations.